Oxigene
OXGN
skidded $1.85, or 15 percent, to $10.50. The stock soared more than 50 percent on Monday after the small, Watertown, Mass.-based biotech firm said its experimental thyroid cancer therapy would have market exclusivity protections if it wins regulatory clearance. See full story.

But Jason Zhang, senior analyst with Independent Research Group, said that the reaction to news about the therapy's "orphan drug" status had been "excessive."

Through the orphan drug designation, a company can get seven years of U.S. market exclusivity for a product. The Food and Drug Administration grants the protection from competition as an incentive to develop therapies for rare diseases.

But Zhang said the orphan drug designation "has nothing to do with a drug's clinical efficacy or eventual approval."

The FDA has certified that Oxigene's drug, CA4P, would treat a rare disease, but the agency hasn't committed itself to approving the still-experimental compound.

"We have to advise investors not to get caught up in this," said Zhang, who has a "sell" rating on Oxigene shares. "The stock traded up yesterday on insubstantial news."

The U.K.-based medical technologies company reported a profit decline for the first six months of the year but called the outlook for the balance of the year "encouraging" and projected 2003 earnings per share would be up 8 to 10 percent.

Elsewhere, shares of Teva Pharmaceutical
TEVA, +0.77%
rose $1.25, or 2.2 percent, to $58. The Israeli-based company reported a better-than-expected second-quarter profit amid strong sales of its generic drugs and its branded multiple sclerosis therapy, Copaxone. See full story.

The Amex Pharmaceutical Index
$DRG
lost 1 percent to percent to 316.05.

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